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Developing Asia kicks back against EU-USA campaign to kill the financing of new coal mining & coal-fired electricity generation

THIS WEEK INDIA’s Environment, Forest & Climate Change Minister, Prakash Javadekar, castigated European Union and USA efforts to close down coal-fired electricity power plants in energy-deprived developing countries through the denial of financing by members of the Organisation for Economic Co-operation and Development (OECD).

The EU-USA strategy was to restrict financing to expensive "ultra-critical" very high pressure boiler technology but a joint effort by South Korea and Australia saw the final agreement approve investment in the alternative “supercritical” coal-fired electricity generating technology championed by Japan, which is already standard in China and being encouraged in India where some 75% of new coal power plants are scheduled.

Prakash Javadekar

“We are fighting for all developing countries,” Mr Javadekar said in an interview. “The cost of these technologies should not be prohibitive for the developing world …Technology cooperation and availing technology at affordable cost is the issue.”

Asked about the campaign for divestment in coal mining and power-fired power generation in the lead-up to the United Nations Climate Change Conference commencing in Paris on 30 November, the Minister replied: “Any unnatural restriction on natural growth of developing world is unacceptable. If someone is putting restrictions on India or any developing country it is unacceptable.

Drawing attention to India’s per capita coal consumption being “1/5th of US” he argued the right to "at least go up" to the USA’s level. “You cannot have un-natural restrictions on this. We are already adopting clean coal technologies, we are also adopting new energy mechanisms whereby our energy sources would be cleaner than before. Importantly, we are on our development trajectory and will expand our energy sector, still we will be expanding our non-fossil fuel share to 40%. It’s huge. Now if you see Germany is shifting from nuclear to coal. How can you (the developed world) practice one thing and preach something else.”

Meanwhile China, which has recently experienced a small decline in coal consumption, is continuing its massive drive to double predominantly coal-fired power generation by 2030 and is also reaching out to accelerate similar plants in other Asian countries.

Source: Energy Information Administration, based on SSY Consultancy and Research Ltd, International Energy Agency, U.S. Department of Commerce, and
Indonesia Central Bureau of Statistics

For instance, the Joint Cooperation Committee of the China-Pakistan Economic Corridorhas approved the expansion of China-financed coal-mine-mouth power plants in Pakistan’s Thar desert from 660 Megawatts to 2600 and Indonesia’s Development Planning Agency has announced the approval of a $1 billion loan from the China-lead Asia Infrastructure Investment Bank to assist the country’s 35,000 megawatts of additional power capacity, primarily coal-fired, planned for the next four years.

According to the International Energy Agency’s recently published 2015 World Energy Outlook, China's coal use reached a plateau as its economy rebalanced and as “overall energy demand growth slows, before declining”.

Now India “moves to centre stage in global energy, with high levels of economic growth, a large (and growing) population and low (but increasing) levels of energy use per capita all pushing energy demand to two-and-a-half-times current levels.”

“India’s 1 billion tons of coal consumption still pales in comparison to China’s (more than 4 billion tons annually),” Nick Cunningham has pointed out. “But now that China’s coal imports may have leveled off—by some estimates … Coal miners the world over will be fighting for market share in India.”

The USA’s Energy Information Administration concurs: “China and India accounted for 98% of the increase in world coal trade from 2008 to 2013 … Nearly all of the 47% growth in total world coal trade between 2008 and 2013 was driven by rising coal import demands by countries in Asia, specifically China and India. Coal trade in the rest of the world declined over the same period. However, data for 2014 and 2015 indicate a reversal of this trend, with declines in China's coal imports currently on pace to more than offset slight increases in other countries in both years.”

However India is endeavouring not to rely solely on imported coal, particularly as supplier Indonesia and other South East Asian nations mobilise to satisfy their own electricity supply deficits. Thus the domestic coal mining expansion program underway in India – lead by a reinvigorated state enterprise, Coal India Ltd – is accompanied by three major rail transportation projects to facilitate increased shipments of coal from major producing regions in northeastern India to demand centers in other parts of the country.

According to the IEA, increases in exports from Indonesia and Australia met most of the expansion in international coal trade between 2008 and 2013. “Indonesia's exports increased by 247 million short tons, accounting for 56% of world coal export growth. Australia's exports increased by 106 million short tons, accounting for an additional 24% of the global increase.”